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- KUALA LUMPUR: Puncak Niaga Holdings Bhd (Puncak) has agreed to give more time to Kumpulan Darul Ehsan Bhd (KDEB), which has proposed to acquire the former’s water assets in its bid to consolidate the Selangor water industry.
- In a filing with Bursa Malaysia yesterday, Puncak said it had issued a letter to KDEB, agreeing to its request for a further extension of time until Jan 15, 2014 to respond to Puncak’s letter dated Dec 4, 2013 with regard to the sale of its water assets.
- In the letter, Puncak, controlled by Tan Sri Rozali Ismail, conveyed its general acceptance in principle of the offer from KDEB that was made in November, but requested for other terms and conditions to be met.
- In its fifth attempt to consolidate the state’s water assets, KDEB on Nov 21 proposed to purchase a 100% equity interest in Puncak Niaga (M) Sdn Bhd (PNSB) and a 70% stake in Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) for RM5.594 billion.
- It had also offered to take over the assets of two other concessionaires, Gamuda Bhd and Kumpulan Perangsang Selangor Bhd (KPS), bringing KDEB’s total offers to RM9.56 billion to all the water concession holders.
- Similarly, KPS on Dec 31 agreed to the time extension for KDEB. Gamuda, on the other hand, earlier last month said it was unable to consider the offer.
- In the Dec 4 letter, Puncak’s terms included that the total equity contribution to be paid to the group to include a compounded return of 15% per annum — taken as compensation for Puncak for the loss of future earnings as a result of the sale.
- Besides, the debts due from Syabas to PNSB, along with any and all residual cash in both companies, should be paid to Puncak.
- Puncak also requested to remove the requirement of due diligence post acceptance of the offers.
- This is the second-time extension requested by KDEB as it had earlier on Dec 12 requested for an extension of time until Dec 31 to come back with an appropriate response, to which Puncak agreed.
- Puncak had deliberated on KDEB’s offers at two separate board meetings held on Nov 28 and Dec 3.
- Puncak initially requested KDEB to reply within 7 days thereof from its letter of acceptance in principle of the offers dated Dec 4.
- Nonetheless, Puncak said it was hopeful that KDEB will favourably agree to the former’s terms and conditions to push through the consolidation of the Selangor water industry, which has been in a deadlock situation for four years. -- The Edge Financial Daily
